Using the Indirect Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the indirect method.
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When using the indirect method, where is the issuance of stock to retire a long-term debt shown on the statement of cash flows?
A) Operating activity
B) Investing activity
C) Financing activity
D) Noncash investing or financing activity

Question

Using the Indirect Method 
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the indirect method.
-
When using the indirect method, where is the issuance of stock to retire a long-term debt shown on the statement of cash flows?
A) Operating activity
B) Investing activity
C) Financing activity
D) Noncash investing or financing activity

Quizplus · Accepted Answer

The issuance of stock to retire a long-term debt is a noncash transaction and is reported in the supplementary section of the cash flow statement as a noncash investing or financing activity.